Case Problem: Quality Problems at the Tech Bookstores

Tech is a major state university located in a small, rural college town. Tech Services is an
incorporated university entity that operates two bookstores, one on campus and one off campus at
a nearby mall. The oncampus store sells school supplies, textbooks, and school-licensed apparel
and gifts and it has a large computer department. The off-campus store sells textbooks, school
supplies, and licensed apparel and gifts and it has a large trade book department. The on-campus
store has very limited parking, but it is within easy walking distance of the downtown area, all
dormitories, and the football stadium and basket- ball arena. The off-campus store has plenty of
parking, but it is not within walking distance of campus, although it is on the town bus line. Both
stores compete with several other independent and national chain college bookstores in the town
plus several school supply stores, apparel stores, computer stores, and trade bookstores. The town
and university have been growing steadily over the past decade, and the football team has been
highly ranked and gone to a bowl for eight straight seasons.

The Tech bookstores have a long-standing policy of selling textbooks with a very small markup
(just above cost), which causes competing stores to follow suit. However, because textbooks are
so expensive anyway most students believe the Tech bookstores gouge them on text- book prices.
In order to offset the lack of profit on textbooks, the Tech bookstores sell all other products at a
relatively high price. All “profits” from the stores are used to fund student-related projects such as
new athletic fields and student center enhancements.

Tech Services has a Board of Directors made up of fac- ulty, administrators, and students. The
executive direc- tor, Mr. David Watson, reports to the Board of Directors and oversees the
operation of the bookstores (plus all on-campus vending and athletic event vending). His office is
in the on-campus store. Both bookstores have a store manager and an assistant store manager.
There is one textbook manager for both stores, a trade book manager, a single school supplies and
apparel manager, and a computer department manager, as well as a number of staff people,
including a computer director and staff, a marketing director, a finance staff, a personnel director,
a warehouse manager and secretaries. Almost all of the floor employees including cash register
operators, sales clerks, stock people, delivery truck drivers, and warehouse workers, are part-time
Tech students. Hiring Tech students has been a long-standing university policy in order to provide
students with employment opportunities. The bookstores have a high rate of turnover among the
student employees, as would be expected.

Several incidents have occurred at the off-campus store that have caused the Tech Services Board
of Direc- tors concern. In one incident a student employee was ar- rested for drug possession. In
another incident a faculty customer and student employee got into a shouting match when the
employee could not locate a well-known book on the bookstore computer system and the faculty
member got frustrated over the time it was taking. In still another incident an alumnus who had
visited the store after a football game sent a letter to the university president indicating that a
student employee had been rude to him when he asked a question about the return policy for an
apparel item he had purchased on the bookstore’s Web site. When the student did not know the
return policy, he told the customer in a condescending manner to come back later. The last incident
was an offhand remark made by a local town resident to a Board member at a party about the
difficulty she had completing a purchase at the mall store because the registers were unmanned,
although she could see several employees talking together in the store.

Although sales and profits at the bookstore have been satisfactory and steady over the past few
years, the Board of Directors is extremely sensitive to criticism about anything that might have the
potential to embarrass the university. The Board of Directors suggested to Mr. Watson that he
might consider some type of assessment of the service at the bookstores to see if there was a
problem. Mr. Watson initially attempted to make random, surprise visits to the bookstores to see
if he could detect any problems; however, there seemed to be a jungle telegraph system that alerted
his employees whenever he entered a store, so he abandoned that idea. Next he decided to try two
other things. First he conducted a customer survey during a two-week period in the middle of the
semester at both stores. As customers left the store, he had employees ask them to respond to a
brief questionnaire. Second, he hired several graduate students to pose as customers and make
purchases and ask specific questions of sales clerks, and report on their experiences.

Selected results from the customer survey are on the table below.

The only consistent responses from the graduate students posing as customers were that the student
employ- ees were sometimes not that familiar with store policies, how to operate the store
computer systems, what products were available, and where products were located in the stores.
When they didn’t know something they sometimes got defensive. A few also said that students
some- times appeared lackadaisical and bored.

Using observations of the operation of your own college bookstores to assist you, answer the
following questions.
Questions:

a. Why do you think Mr. Watson organized the customer survey the way he did? What other
things do you think he might have done to analyze the stores’ quality problems?
b. Develop Pareto charts to help analyze the survey results
c. How would you define quality at the bookstores?
d. Discuss what you believe are the quality problems the bookstores have
e. What are the bookstores’ costs of poor quality?
f. What actions or programs would you propose to improve quality at the bookstores?
g. What obstacles do you perceive might exist to hinder changes at the bookstores and quality
improvement?